ABC Ltd makes a special one-off pension contribution of €260,000 while paying €100,000 as an ordinary annual contribution. How much of the special contribution qualifies for corporation tax relief in the accounting period it is paid?

• A. Nil
• B. €86,667
• C. €100,000
• D. €260,000

Answer: (C)

Relief for employer pension contributions against corporation tax is given for qualifying contributions paid to an approved scheme, but only up to the amount you would normally contribute in the period. A one-off, extra top-up doesn’t generate additional relief in that same accounting period beyond the regular annual amount. Here, the ordinary annual contribution is €100,000, so only €100,000 qualifies for corporation tax relief in the period it’s paid. The extra €160,000 in the special contribution does not attract additional relief in that period (it may be treated differently in future periods under the scheme’s rules, but not as immediate relief here).